The Lansing State Journal reports that the inability Michigan’s governor and lawmakers to come to an agreement that solves the state’s budget crisis is not playing well on Wall Street. Standard & Poor’s Rating Service lists Michigan is the only state with a negative credit outlook due to massive shortfalls in its current and upcoming budgets and a failure to pass a replacement for the expiring Single Business Tax. S&P Managing Director James Wiemken says:
“Michigan’s credit outlook could be revised to stable if the legislature passes a tax reform package and addresses the remainder of the structural imbalance in the fiscal 2008 budget. From a credit perspective, this is probably the most important legislative session in more than a decade.”
The report (not available on the Standard & Poors site) also notes that notes that the state has not been downgraded further in the face of a $900 million shortfall in the current budget and a $1 billion deficit in the next because the Granholm proposal addresses the state’s structural deficit in the next budget year and “moves the state’s revenue base over a broader and more stable part of the economy.”
Read Analysts call on Michigan to solve budget crisis soon in the LSJ. The article includes links to Gov. Jennifer Granholm and Senate Majority Leader Mike Bishop, and that seems a very good place to begin.